BRIC countries: Are you ready for the new BRIC consumer?
Brazil, Russia, India and China, collectively referred to as the BRIC countries, are home to an enormous emerging middle class with massive buying power.
The numbers involved are mind-boggling: more than 2 billion middle-class consumers in the BRIC countries and other emerging nations are currently spending US$6.9 trillion per annum and, according to McKinsey, this will triple to US$20 trillion in the next decade. To give you some sense of perspective, that’s about double the current consumption of the USA.
Among many other statistics, here a few highlights:
- Today, more cars are sold in China than in the US, with experts predicting that by 2030, 50 million cars will be sold there every year.
- In India, over 240 million people will enter the workforce in the next 20 years. The number of people who’ll earn more than 1 million rupees per year and be considered ‘affluent’ will be larger than the entire population of Australia.
- Retail sales in Moscow now exceed those in Paris and London.
- In Brazil, 32 million people have moved into the “middle” and “high” income brackets in the last five years, and that figure is expected to double in the next five.
- China and India together already have 500 million internet users. That number will more than double by 2015, generating revenues from internet commerce of more than $80 billion.
The good news for new market entrants is that all players in the BRIC countries (big and small) have to change their approach to serving the new emerging consumer. This levels the playing field and creates new opportunities for smart, innovative and brave new entrants who are willing to jump in and swim with the bigger fish.
"Is there something that you do or sell that would appeal to a small segment of a country of over 1.3 billion people?"
Australian businesses of all sizes need to develop a strategy to engage with these new emerging economies. You can’t sit back and allow this once-in-a-generation opportunity to pass by without at least giving some thought to how it could affect your business – whether as an opportunity or a threat.
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There are particular opportunities for those in progressive and innovative industries such as technology, design, high value manufacturing and environmental protection, and in some more traditional areas like education, tourism, finance and professional services.
China is often seen as the land of opportunity, especially as it’s on our doorstep, and Australia has enjoyed a strong relationship with it for over 35 years. Is there something that you do or sell that would appeal to a small segment of a country of over 1.3 billion people? Or perhaps Russia, India or Brazil represents a better opportunity for you?
If so, don’t let the grass grow under your feet. Start by familiarising yourself with those countries. Read a book, search the internet, take a holiday or join a trade delegation. Saturate yourself with everything you can find about these new economic powerhouses, and get your business ready for international expansion.
Are you developing a BRIC strategy? Or maybe you’ve already dipped your toe in the water? Please share your thoughts and experiences below.